As part of a lobbying campaign to persuade Congress to regulate the fees that merchants pay when customers use debit cards, the firm DCI Group scheduled hundreds of Hill meetings and generated more than 31,500 constituent calls to congressional offices.
Working for its then-client the Retail Industry Leaders Association, DCI Group also “completed 1,606 individualized contacts in target [Hill] offices from small business owners,” according to a promotional “case study” that the firm prepared to pitch its services to another client.
The relationship between DCI and the retailers, which resulted in language favorable to the industry being written into law, doesn’t appear anywhere in congressional lobbying records.
The one-page memo offers a glimpse into the world of paid grass-roots organizing that’s hidden from public view because the work is not covered by the Lobbying Disclosure Act, even though it is part of an effort to influence legislation and public policy. Traditional lobbyists must report their clients and provide an estimate of their fees.
DCI Group represented RILA from 2009 to 2011, according to a RILA spokesman, but it did not file a lobbying disclosure report with Congress because the work fell outside the scope of the law.
“The law turns on those who actually make lobbying contacts,” said William Minor, a partner at DLA Piper who specializes in lobbying ethics law. “If no individual qualifies as a lobbyist because no individual has made lobbying contacts, then the firm would not be under any obligation to register and report.”
Grass-roots firms can help identify and mobilize constituents to contact their members of Congress. They work to secure meetings with lawmakers and their aides and coach activists on what to say and how best to present their case. They often do not attend the meetings with lawmakers, but grass-roots professionals do engage in media outreach, placing op-eds in publications and using advertising, social media and online tools to gin up voters on specific issues.
When Congress debated lobbying revisions in 2006 and 2007, members such as Sen. Carl Levin, D-Mich., pushed for paid grass-roots work to be included in public filings. “These are coordinated efforts costing tens of thousands of dollars, which on their face are part of professional lobbying efforts,” Levin said at the time.
The DCI memo spells out such activities by the numbers. The case study, a copy of which was obtained by CQ Roll Call, was included in a packet of materials that DCI prepared to solicit business from the American Coalition for Clean Coal Electricity. DCI Group does not dispute its authenticity. Lisa Camooso Miller, a spokeswoman for the clean coal group, said DCI Group represents its interests and is in the running “along with some other folks” to retain the grass-roots contract. She added that the coal group is “in the midst” of the selection process.
RILA’s members include big retailers such as Wal-Mart Stores Inc., Home Depot Inc. and Safeway Inc. DCI Group helped RILA find and activate owners of small businesses who said the debit card interchange fees also hurt their bottom lines. That added a Main Street dimension to a battle pitting merchants against banks and credit card companies such as Visa Inc. and MasterCard Inc.
“Through field asset management, DCI Group mobilized hundreds of small business owners across the country to successfully reframe a high-profile issue before Congress,” the case study stated.
DCI scheduled and prepared small-business owners for 264 personal meetings with members and staff, the document added. In addition, the firm “conducted five fly-ins,” where more than 300 small-business owners urged their senators and representatives to support swipe fee legislation.
To trigger an LDA filing, a paid advocate must make at least two lobbying contacts with covered government officials and spend at least 20 percent of his or her time on lobbying activities.
“We didn’t come anywhere near the threshold for lobbying,” DCI Group spokesman Craig Stevens said. “We are very diligent to honor the letter and spirit of all the rules and regulations that Congress has set forth.”
Stevens added: “The reality is there were thousands of small- and large-business owners who engaged in this debate and talked with their local representatives about the harmful impact that swipe fees were having on their business. These people took part in the democratic process, and Congress and the president heard them and ultimately enacted legislation that helped them compete more effectively in the marketplace. We were proud to be partners with them.”
The swipe fee matter was addressed in the retail industry’s favor in the Dodd-Frank financial regulation law. RILA spokesman Brian Dodge called DCI “an integral part of this comprehensive campaign.”
“DCI helped us reach out even further,” Dodge said. “Their task, among other things, was to help us identify and engage other merchants who shared our perspective and then give them the tools to turn their frustrations into communications with their lawmakers.”
Sarah Bryner, research director for the Center for Responsive Politics, which tracks lobbying data, said the DCI case study shows that much of what K Street firms do can go undisclosed.
“A lot of activity that a normal person calls lobbying falls through these cracks and never makes it on to the public record,” she said. “I think that’s unfortunate.”
Rep. Eric Swalwell, D-Calif., walks on Broadway after a Future Forum with young entrepreneurs in the Flatiron District of New York City, April 16, 2015. Reps. Steve Israel, D-N.Y., Seth Moulton, D-Mass., and Grace Meng, D-N.Y., also attended.